Tag Archives: Mobile Internet

Will mobile internet overtakes PC based internet use?

According to IBM more than 50 per cent of consumers would substitute their PC based internet connection for their mobile. As the majority of new phones come with internet access as standard we predict that more people will access the internet from their mobile than their PC by the end of 2009. According to T-Mobile Germany, browsing on iPhones was 30 times more than on other handsets, and at Vodafone Germany 45% of data ARPU already is mobile internet, due to partnerships with Google, YouTube and MySpace and using widgets.

Trend description by Timo Ahomäki is Chief Scientist & VP Product Management at Airwide Solution, a leading messaging company.

Will mobile media be driven out of emerging markets (like China, India etc.)?

During the last 15 years, the real innovation on the internet in terms of applications, technology, and business model have primarily come out of the US. It’s not surprising that’s the case, as the Internet was started there and the US had more internet users than any other country in the world. (Although China recently passed the US in terms of internet users in 2008)

However, for the mobile internet and mobile media in general, the US is far from being the key source of innovation the way it has been on the internet. It was a fairly late comer in terms of 3G and MVAS adoption compared to many parts of Asia and Europe. In fact, I might hypothesized that the widespread availability of computers and broadband made Americans less interested/dependent on mobile that other markets.

Some people will ask me if I think China or India will be driving mobile media going forward given they are the fastest growing markets in the world and China having about 3x the number of mobile users of the US and 6X of Japan. My long term answer is maybe, after about 6-10 years, but my short term answer is definitely not. Most new fundamental innovation happens when a critical mass of conditions exists between the maturity of network, user scale, advanced devices and willingness of users to pay.

The Chinese and Indian network infrastructure is WAY behind Japan, much of EU and even the US. 3G licenses just got issued in China this year…and widespread adoption of the new network and 3G devices won’t happen for 3-5 years. There are three 3G networks and 3 2-2.5G networks in the market and lots of legacy handsets to support (over 3000 active models in China). The wide gap in income ranges also means that there will need to be a wide range of price range and capabilities of phones in the market for a long time to come. This also means that the newest/latest technologies and devices won’t be able to get broadly adopted on a ubiquitous basis as other wealthier and smaller countries.

Lastly, there will continue to be an issue with Chinese users paying a high price for mobile content/apps. There was a real abuse of mobile value added services in the past by service providers who took advantage of users and the government/carriers have really cracked down on them in the last few years with polices that makes it very difficult for any company to survive, let alone thrive in the current mobile SP industry environment. Chinese entrepreneurs have also been trained to be very practical and limit cost of long term research but instead opt for winning via faster execution than competitors. So there is no real advantage to being innovative…the real winners are those that copy and get to scale first.

This type of management philosophy is not conducive to creating some revolutionary innovation. I wish I could be more optimistic, but the current state of the Chinese (and Indian) markets just don’t support it. However this could all change in 5+ years as the network matures, the 3G users grow, smart phones become the norm, and buying power rises with the strong overall growth of these markets (relative to western markets). So the future is bright, but don’t expect too much leadership or innovation from the emerging markets in the near term in terms.

Will the Open Mobile Internet shape our digital future radically?

The concept of an Open Mobile Internet (OMI) means different things to different people depending on their viewpoint and specialty; however the end result is still the same. The aim of the various Open Mobile Internet initiatives is to open up the restricted mobile industry value chain to create a ‘fixed-Internet’ style ecosystem to replace the existing closed network. In my worldview a true Open Mobile Internet means satisfying the following access conditions: “use any mobile device of my choice; on any network operators’ wireless network; to access any application I choose, from whomever I choose; and running whatever operating system I choose”. This is asking a lot and the actual concept can be implemented with a more flexible approach. There are alternative views that suggest that: the mobile internet should be regulated by the network operators; mobile devices should have exclusivity on a particular network; users must commit to 2–3 years with operators; and mobile applications must be acquired from the network operator.

Related Articles:
Do you need an Ecosystem for Mobile Media? von Marco Koeder

The current mobile Internet landscape is poised for change. Will it become a more tightly controlled mobile internet? Or merely Internet accessed from mobile devices, or will an Open Mobile Internet ecosystem emerge? The truth is, only time will reveal how the mobile Internet will evolve, however there is strong evidence that points towards a more open concept. Some of the technical initiatives that are underway are illustrated in figure one.

Open Mobile Internet Initiatives
Figure 1 : Example of Open Mobile Internet Initiatives

When the OMI eventually happens, it will bring a fundamental change to the structure of the whole mobile industry, producing new innovative business models, new partnership, and alternative routes to market for content; creating a vibrant mobile content ecosystem. The idea of an OMI concept would have been laughed at two years ago, but due to consumer demands, organizations such as Verizon, At&t, and Google have warmed to the idea. The OMI concept will effectively impact the core interests of most organizations involved in the mobile Internet industry, but at what cost? And who is likely to benefit from the emerging ecosystem? The most pressing concern of the OMI relates to the security and privacy. What novel security and privacy breaches should we expect from allowing mobile content from a variety of sources?

The Iphone vs Gphone comparison is a distraction.

Mobile experts are currently occupied writing or reading device functionality comparisons between the I-Phone and Gphone, providing a distraction from the fact that the Gphone was built on an open source platform called Android. Being open source means that any other media conglomerate can legitimately implement the same code creating their unique branded platform such as an APhone for the Amazon mobile platform, or CPhone for Coke platform or for arguments sake, the O-Phone (open phone). Conceptually, it is really that easy and more important it is free.

In reality, it is not that simple, there are three additional pieces of the puzzle (illustrated in figure 2) that must be addressed. The first is access to mobile content via an application market place, the second is selecting a suitable mobile device, and the third piece is implementing the device on an appropriate mobile network.

Solving the Open mobile Internet Puzzle
Figure 2: Solving the Open mobile Internet Puzzle

Mobile Content via a vibrant Marketplace

The first question that needs to be addressed if the traditional model of network operators providing mobile content (on-deck content) is discarded, is what are the business models for alternative channels for content, software and services; and how will open environments such as Google’s Android compare with closed systems like on deck and I-Phone marketplace?

Mobile content on an open device has advantages over the traditional internet content on a fixed device such as a desktop due to nnovations such as locations and navigation features, cameras with barcode scanning software, touch screen capabilities, support for multiple network types and access to web2.0 applications. These innovations will facilitate the development of innovative and interactive content by independent developers. The network operators are in a unique position to take advantage of the new content by offering flat fee usage to customers and receiving a profit share from the content providers and application developers.

Since the launch of the I-Phone application market place, it has become clear that the mobile industry value chain is evolving and the convergence with the Internet type applications is now a reality. The delivery of content such as software applications or multimedia files via sources other than network operators is described as off-deck. The fast growing off-deck universe is opening new channels and routes to market for independent content developers. This approach makes it easier to connect content and services with customers.

It is important to stress that even though the I-Phone model is off desk, it a closed system, an example of an open system would be Google’s android system or the Linux LIMO. Running a mobile application marketplace can actually be a profitable venture. Apples I-Phone application store was alleged to have 60 million downloads in its first month generating $70 million for independent developers, and $30m for Apple.

Like the I-phone platform, anyone can write programs for the GPhone and hence the
O-phone. Google has recently launched the Android developer challenge, which will provide $10 million in awards to independent developers for building innovative applications on the Android platform. If the OMI platform is branded, applications can be ‘policed’ for suitability and decency similar to the I-Phone market place, policing is the correct term based on grumblings from some of the I-Phones application developers, who believe that their applications have been pulled from the marketplace with little or no reasonable explanation. It critical that there is some form of gateway regulations or the proliferation of malware and viruses may be deployed in a similar manner to the fixed internet.

Open converged devices will rule the airwaves

The second piece of the puzzle is the availability of open converged devices. Mobile device have undergone tremendous convergence, incorporating GPS receivers, high resolution camera and video recorders. The next generation phones will support barcode scanning, motion detection, auto sensing, ultra sensitive touch screen capabilities and RFID support; paving the way for innovative applications and services.

In addition to the HTC phone used by Google, there are currently three additional devices that will run android operating system, LG, Motorola and a Samsung device. The key to the OMI lies with the partnership deals with the network operator. To ensure that content can be distributed to a wider audience, it would be more beneficial not to have a device exclusivity deal with a particular mobile network operator. The fundamental principle of an open network is choice, and even though a consumer may be offered a wide choice of independently developed applications, forcing the consumer to sign a 2 – 3 year contract with a particular network, they may or may not like, is hardly enticing for the consumer. It was disappointing to see that Google opted for an exclusivity deal with T-Mobile in the UK.

Personal Broadband delivered via an open wireless network.

The final piece of the puzzle is the availability of an open mobile network that is capable of broadband spends. When considering an open mobile network, the burning question is what is the rationale for a network operator to open up their network to 3rd party’s’ devices / applications? There is no longer any doubt that the last major barrier in the OMI saga has finally crumbled. In the past, network operators have been strong advocates of the closed network and ‘on deck’ applications, but it now seems that the U.S. wireless industry is moving toward a more competitive framework. It is difficult to speculate on why an open approach is being considered, however the US Federal Communications Commission (FCC) decision to impose open-access rules in the last spectrum auction may have helped the decision. The rules stipulate that companies that won the recent spectrum licenses are mandated to ensure that all mobile phones, including those from rival networks must work on their networks. T-Mobile, Verizon Wireless and AT&T/Sprint have all implemented initiatives that reflect a shift from the traditional model, to opening up their network to third party devices and content. The network operators may be concerned about the potential loss of revenue, but they are also keen to take control of the lucrative data usage that will be generated from the new devices and content being deployed on mobile networks. A locked network delivering a small set of application to a limited user base may not be the smart thing to do if there is a sudden increase of usage from open devices. In March 2008, Verizon launched an open-network initiative by distributing the technical specifications that will allow non-Verizon devices to work on their network. Eight hundred companies have been reported to have downloaded the specification; this highlights the growing popularity of this trend.

The next major evolution in open networks will see the full convergence of both mobile and broadband technologies to create a phenomenon called Personal Broadband. Consumers are demanding services that are personal, convenient and affordable. The ethos of the 3Ws – ‘whatever content’, ‘whenever I want it, ‘wherever I am’ is a significant shift from the current approach of internet connectivity. The mobile devices that are expected to start this revolution are already available; however, the final key to the puzzle is the availability of regional and national wireless broadband network. An important milestone will be reached early 2009 when Sprint plans to launch a national WiMAX network. The WiMAX network has the capability to support any device with embedded with a processer such as Laptops, Smartphone’s or PDA. The new network is expected to offer flexible subscription terms, which allow users to access high speed mobile networks without 3 years contracts, similar to WiFi hotspot business models.

Summary
There are phenomenal implications of combining “open” software, “open” hardware on an “open” network? The current traditional closed mobile Internet could transform into a vibrant ecosystem in which the network operator, content provider and application developers, operate together with revenue sharing business models. There is no technical reason why a large media or entertainment organization cannot enter this market as the barrier to entry has been flattened with the open source platform called Android, which is similar to the I-Phone platform. The Android platform is a platform that will see an abundance of programs which will evolve into a profitable marketplace for developers. The other factor is the open network availability question, and there are strong positive moves from network operators and the US regulators with this regard. The future looks bright and it seems that an Open Mobile Internet is about to be unleashed.