Is the Unified Communications Business Growing or Shrinking?

One of the "problems" observers have when evaluating the size of the unified communications market is that UC includes so many different legacy products and services, ranging from business phone services to software applications and hosted services.

The other issue is that UC applications overlap with and complement other applications such as mobility and social networking, which can make an accurate estimate of product sales difficult. Analysts at Forrester Research, for example, suggest that sales of legacy products of all sorts are not growing much at all, while sales of business phone systems might drop precipitously in coming years. This forecast represents annual sales volume in billions of dollars, for example.

Whether UC is important or not is not the issue. Lots of other useful, even essential services and applications, such as email and voice, represent indirect revenue streams, or even declining revenue, despite their inherent usefulness.

Something of that sort seems to be underway in many segments of the UC business. This forecast does not cover other product segments that likely will represent parts of the future UC revenue stream, such as telepresence, a direct UC application, or even access services such as SIP trunking that will be used to support unified communications.

How Significant Will Google "Nexus One" Be?

It's increasingly clear that a new Google-branded "Nexus One" unlocked smartphone will be sold in 2010. What remains unclear is how much impact the device will have, for a number of prosaic reasons. Unless Google has designed a dual-mode, multi-band device capable of operating on both GSM and CDMA air interfaces, roughly half the market will be inaccessible. Even if the device is GSM certified, it has to be built using a radio operating across all U.S. GSM bands, and that isn't entirely clear, yet.

It might be the case that the Nexus One simply has not yet been certified for AT&T's 3G spectrum bands, or for Sprint and Verizon networks using CDMA. For an unlocked device to work across all four of the major U.S. networks, that would be required.

So far, it appears the device is certified only on some of the U.S. GSM bands. What that means is that T-Mobile USA absolutely will be able to support the Nexus One. It might work on AT&T's spectrum as well, but it isn't completely clear that is the case, at the moment. So far, AT&T has declined to offer an Android-based device in its device line up.

That issue should be clarified soon enough. The other issue is the retail price of the phone. Unlocked phones can be bought now in the U.S. market, but few consumers do so, because of the price. Perhaps Google plans to subsidize the device, but if not, Nexus One will not be a mass market device at the start. Few consumers buy devices at $600 when a subsidized device costs $200 to $300.

Perhaps Google plans to offer an installment plan, which will help. If the Nexus One really provides a better user experience, it will be helpful. But if it is sold at full retail price, and works on just one U.S. GSM network, its impact will be limited, to begin with.

Google "Nexus One" Available in January 2010

A new Google-braned phone called the "Nexus One" will be available in January 2010, it now appears. The Android device apparently resembles the unlocked HTC Touch, runs Android 2.1 on a Snapdragon chip and has two microphones, according to a report by eWeek, supporting voice-to-text features.

The move represents a new tack for Google, which to this point has relied solely on handset and carrier partners to propagate Android-powered device in the retail market, with T-Mobile, Verizon Wireless and Sprint all selling Android devices.

Some observers say Google is bothered by a problem frequently encountered with open source software: incompatibilities that frustrate users and provide a less-than-optimal end user experience. Others might suggest Google simply wants to showcase what is possible by more-tightly integating hardware and software, as Apple's iPhone is able to do, providing a more-enjoyable and useful experience.

Why the Google "Mobile Lab" Test?

Whatever else Google may want to demonstrate with its "mobile lab" test, which apparently has Google employees globally testing an Android smartphone, the company likely wants to explore and highlight the use of the mobile device as an intelligent sensor able to use voice input, location and camera features to enrich the "what's around here" features of Google's search experience.

Google first launched "search by voice" about a year ago, and "looking ahead, we dream of combining voice recognition with our language translation infrastructure to provide in-conversation translation," says Google VP Vic Gundotra.

Google recently also introduced "What's Nearby" for Google Maps on Android 1.6+ devices, available as an update from Android Market. The application returns a list of the 10 closest places, including restaurants, shops and other points of interest near a user's location. Local product inventory will be added in 2010.

Visual search also is developing, Gundotra says. A picture taken by a Google-equipped device will return relevant search results based on that visual information, including information on landmarks, works of art, and products.

"Today you frame and snap a photo to get results, but one day visual search will be as natural as pointing a finger," says Gundotra.

Google Phone Appears to be an Unlocked GSM Device

Google's rumored phone appears to be an unlocked GSM device, to be sold under its own brand name, and built by HTC, TechCrunch reports.


What seems clear enough is that Google employees are testing something. Google says it is testing something it calls a "mobile lab," said to be "a device that combines innovative hardware from a partner with software that runs on Android to experiment with new mobile features and capabilities, and we shared this device with Google employees across the globe."

"Unfortunately, because dogfooding is a process exclusively for Google employees, we cannot share specific product details. We hope to share more after our dogfood diet," Google says.

Google-Branded Phone Coming in January?

Rumors about a Google-designed and Google-branded smartphone have circulated over the past several years, though the company consistently had denied the reports. But the rumors are building again. TechCrunch seems to think the umors are more credible this time.

To be sure, Google repeatedly has said it is not in  the phone-making business.  “We're not making hardware,” Andy Rubin, who heads up Google Android development. “We're enabling other people to build hardware.”

Of course, some might parse the words and say that Google doesn't have to build its own phone: it simply has to commission a company that does build phones, to build one, with tightly-integrated Google control over the software load. There are many nuances to such an approach.

The device could be tightly integrated, but not Google branded. It could be Google branded but not exclusive. It could operate as an unlocked data-only device on a single air interface or several.

A Google-branded and controlled device might fly in the face of the open source nature of the operating system, which so far has featured a loosely-coupled approach.

It also might open a new and unwanted level of channel conflict with the firms that are counting on Android to power their own devices and create a robust applications business. On the other hand, such a move could be viewed as an effort to demonstrate what is possible using Android, more than anything else.

The current rumors say the device is built by HTC, is quite thin, does not have a keyboard, and uses voice recognition for virtually all apps.

Cynics might argue "leaking" rumors of a game-changing device are a time-tested way of "freezing" sales of competitive devices. And there is at least some anecdotal evidence that some potential Android sales are on hold until the rumors convincing are disproved or confirmed.

To be sure, any Google move to build a tightly-integrated device, Google branded and supported, would be a fundamental shift in approach that would imperil its effort to foster widespread use of the Android operating system by a wide range of manufacturers and service providers.

Apple is the only company in the mobility business that delivers both the hardware and software on a tightly-controlled basis.

Google Adds "Place Pages"

One simple step any business can take to become more involved with mobile-based marketing is to take advantage of "Place Pages," a new feature Google is introducing.

Basically, a Place Page is a free one-page listing any business can sign up for, and which is available to mobile and PC-based searches using Google Maps.


Retailers can create a "Place Page" by going to the Google "Local Business Center" at
http://www.google.com/local/add/analyticsSplashPage?service=lbc&gl=us&utm_source=/lbc&utm_medium=van&utm_campaign=en&hl=en-US.

Listings are free to create. Think of it as a sort of enhanced phone book whose entries pop up on a Google Map search when a user is looking for something near a physical location.

There's more. The Place Page also allows retailers to create coupons, for example. Also, an analytics feature also allows retailers to track where customers are coming from and what they search for to find a particular retail location.

Android Now 14% of Mobile Web Sessions

If you are considering creating a mobile app, the Apple iPhone and Touch still represent the single largest target.

But Android is growing fast. According to an analysis by Flurry, Android users now represent 14 percent of mobile Web sessions.

The iPhone represents 50 percent and the iPod Touch generates 35 percent of mobile Web sessions.

Android seems to be taking share from the iPhone, but not from the Touch.

Americans are Happy with their Products and Services, Sort Of

A new study by the Government Accountability Office suggests 84 percent of U.S. wireless users are "very" or somewhat" satisfied with their wireless phone service. That isn't to say there are no issues: there are.

The GAO says 10 percent of users are "dissatisfied" with their service. About 12 percent say they are dissatisfied with billing, 14 percent are dissatisfied with terms of service, 11 percent unhappy with call quality and 12 percent dissatisfied with customer service.

But 76 percent of respondents are satisfied with billing; 72 percent satisfied with terms of service, 85 percent satisfied with call quality and 70 percent satisfied with customer service.

In terms of complaints received by the Federal Communications Commission from end users, 55,000 were unhappy with billing and rates. About 14,000 were unhappy with call quality, 13,000 complained about contract early termination issues and 12,000 were unhappy with customer service, GAO says.

In terms of complaints, billing issues were more than 400 percent more common that complaints about call quality, contract termination or customer service.

In some ways, in fact, the GAO study suggests a higher degree of satisfaction with wireless service than other surveys might suggest. The American Consumer Satisfaction Index, which ranks consumer satisfaction on a scale running from zero to 100, with 100 being the top score, might suggest less happiness, not only with wireless, but also with cable TV and satellite service, with declining scores for wired voice service.

Did U.S. Consumer Communications Spending Hold Up in 2009?

We will have to wait a while for 2009 figures to be compiled, but history suggests that, when the figures are available, U.S. consumer spending on communications will come in about where it always does, at about 2.3 percent of disposable income.

The reason is that, year in and year out, during booms or recessions, that is what U.S. consumers have spent on communications. The composition of spending changes: more for mobile, more for broadband, less for other services. But as a percentage of disposable income, behavior is remarkably consistent.

By 2012, "Closed" Mobile Business Will be Over

Today, the wireless sector is on the edge of a seismic shift, says Deloitte. A survey of wireless industry executives found that 53 percent of surveyed network service provider executives believe their current closed business models will no longer exist by 2012.

That is a shocking finding, for several reasons. Many in the policy community seem convinced the only way to "change" the mobile industry is to legislate more "openness." Mobile industry executives, on the other hand, already believe openness will be the normal way they compete, within a shockingly short period of time.

One way of putting matters is that before the major legal challenges to any new set of wireless "neutrality" rules can be clarified, the industry already might have moved to an open business model, and arguably would have done so without any government action.

If some readers believe this is highly unlikely, one need look no further than the last major revision of U.S. telecommunications policy, the Telecommunications Act of 1996. Despite the fact that many observers argue the Act "failed," you would be hard pressed to find any user of communications who argues their services, prices and features are "worse" or even "the same" as prior to 1996.

Despite the current mistrust of markets, the recent record suggests that "regulatory failure" did not impede market success, defined as better and richer services for end users.

It appears the same thing is happening in the mobile business, and that mobile industry executives widely believe a shift to open models, precisely the state of affairs many policy advocates desire, already is happening at rapid speed.

In just three short years, economic power in the mobile business will be held by third party application providers, not service providers, mobile executives themselves believe.

More than half of the executives surveyed believe by 2010 the future of mobile will be driven by open mobile content, with 67 percent of the respondents believing it will be a “game changing” force within wireless in the short-term, Deloitte reports.

"When asked which mobile operating system has the greatest potential to be the U.S. de facto standard in five years, Google’s open source Android operating system was the runaway favorite with 43 percent of all votes, more than double the score of the next highest finisher," Deloitte says.

"In fact, 27 percent of those surveyed say that Internet companies, rather than network
carriers and handset makers, will dominate the U.S. wireless sector in five years," says Deloitte.

Nearly 60 percent of industry executives surveyed agreed that the future of mobile will be driven by open content and mobile software application providers.

"While almost two thirds of the survey respondents believe that open access regulations will accelerate the commoditization of U.S. wireless network carriers, companies that focus too narrowly on regulatory issues as the key catalyst for change may in fact miss the real market opportunities being driven by open platforms and technologies," Deloitte says.

The regulatory debate over "openness" obscures what will happen, irrespective of any new regulatory intervention. "In fact, when respondents were asked on the best course of action for network carriers to sustain their competitive advantage, keeping network access, devices and services tightly controlled and retaining as much as possible current proprietary business models was the least popular response."

In fact, 74 percent of the executives said that the key to their businesses in the future was to embrace open application and content models. One can argue that regulatory protections to open up networks are important because they will help this "natural" state of affairs to develop on its own.

It might not be politically popular at the moment to argue that a regulatory "light touch" still is the best course of action. But industry executives themselves seem committed to a view that open mobile networks are in fact the fast-coming and basic industry realty.

Whether one agrees that the Telecom Act was a success or failure does not seem to matter. The market seems to have lead to success, in spite of regulatory failure. Maybe we should not be in such a hurry to tinker with the process too much. It looks like openness is the future, no matter what interventions happen, or do not happen.

Global Revenue Now Lead by Mobile

Global telecom services revenue now is lead by mobile services, at 46 percent of total revenue, say researchers at Analysys Mason.

Wired voice revenues now account for 21 percent of total revenues.

Business services account for 14 percent of revenue, while consumer broadband now represents eight percent of total, the firm says.

Video represents about eight percent of total.

Net Neutrality and Free Speech: Issue More Complicated Than You Might Think

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

Most of us likely think we understand what the First Amendment to the U.S. Constitution actually means. Most of us might be surprised at how complicated the matter has proven to be. It comes as no surprise that there is vociferous debate about what speech is, what a "speaker" is and whose speech is to be protected.

Among the issues jurists and courts have had to wrestle with are "whose" rights of speech are protected. Originally, it was the rather narrow right of political speech, a right possessed by the speaker, that was protected. Over time, though, there have been refinements or travesties, depending on one's point of view.

The classic example is free speech restrictions based on time or place, for example. There is no constitutional fight to "yell fire in a crowded theater," settting off a panic.

Over time, courts have had to grapple with what a "speaker" is. Under the law, a corporation, for example, is a "person." Does a person have the right of free speech?

Over time, the definition of "speech" has widened, and now is a mix of the rights of the speaker and the "rights" of the listener.

To the extent that network neutrality touches off yet another round of debates about how the right of free speech applies, we likely will find serious debate yet again. It's a lot more complicated than most of us might think.

Junction Networks Adds Standard Conferencing Features

Junction Networks has added new features to its business voice service packages at no additional cost, providing users features they have asked for, the company says.

“Our goal is to deliver the most cost effective, business-class phone service for 5-100 users. Now, our customers benefit from more features like conference bridging for 15 people and acd queues while still paying under $20 per user, monthly,” stated Michael Oeth, CEO of Junction Networks.

The "Small Business" OnSIP package, which costs $99.95 a month, now includes 15 voicemail boxes; four attendant menus; four groups; a conference bridge and an ACD (automatic call distributor) queue.

The "Medium Business" package, selling for $199.95 a month, now includes 50 voicemail boxes,
six  attendant menus, six groups, five conference bridges and two ACD queues.

The OnSIP Conference Bridge has also been reduced to only $19.95 per month, with a 15 user limit.

The changes are based on customer feedback, especially demand for conferencing features.

The enhancements are examples of two fundamental trends. First, IP telephony providers continually strive to provide more value to their users, often at no incremental cost, sometimes at low cost.

Second, end user demand for conferencing features illustrates the more-important role one-to-many and many-to-many communications now are assuming in the business world. Though much voice and email communications continues in one-to-one mode, lots of other activity has moved to one-to-many channels. Blog posts, microblogging, social network updates and podcasts, for example, are augmenting traditional one-to-one communications.

Are Fixed and Wireless Broadband Equivalents?

Consumer desire to substitute a wireless broadband connection for a fixed connection remains a question whose answers are yet developing. There are few markets, except Austria, where fixed and wireless broadband really are viewed widely by consumers as equivalent products.

So answer the question "yes" in Austria, where wireless and fixed products are seen as a single market, not two. In most markets, though, especially those with robust fiber to home availability, regulators at least do not see the existence of a single functional market.

In most developing markets, wireless might continue to be the preferred access method, so again there is no functional equivalence between fixed and wireless modes.

But at least in some European markets, consumers are, in fact, starting to choose their broadband connections based on price, rather than on whether the service is delivered using a fixed or mobile networks, says Pyramid Research. For fixed network operators, there likely is no good news in those findings.

First, fixed has to compete with mobility, head to head, and it that fight, mobility offers some value fixed services cannot provide, namely the ability to use the broadband connection outside the home. The other bad news: consumers see so little differentiation they are buying based on price.

Such equivalence is highly unusual. The European Commission, which recently deregulated the broadband access market in Austria precisely because it is so competitive, admits that the Austrian situation is unusual. It is the only European Community market where wireless broadband is widely deemed to be a functional substitute for wired services that price regulation is not needed.

Pyramid likewise argues there is a "strong link" between fixed and mobile broadband adoption. So strong a connection, in fact, that these markets can no longer be looked at in isolation, though today's broadband access market still primarily is a matter of competiton between fixed line providers.

But mobile broadband increasingly will affect the fixed sector, Pyramid believes, especially in markets where overall broadband penetration is low. That includes markets such as Russia, Slovakia and Ukraine. In such markets there is only limited opportunity for fixed-mobile broadband bundles, because the services are competitive more than they are complementary.

What remains to be seen, though, is what happens to a highly-competitive market for fixed and wireless broadband when fiber-to-customer services become available. Even the EC says it will continue to monitor the situation and might reimpose regulation if optical fiber is widely deployed. The reason is a belief that, in such a scenario, where wireless competes with fiber-to-home, the products will naturally diverge again.