Except for Wireless, National Broadband Plan Much Ado About Almost Nothing

Oddly enough, the proposed National Broadband Plan is light on new spending and puts primary emphasis on wireless, while mixing in a bit of a grab bag of existing and vexing voice-related issues. The goal of getting 100 Mbps service to 100 million U.S. homes by 2020 appears to be just that, a "goal," not a requirement.

Some people would call that a mistake, but the Federal Communications Commission is not unmindful of some basic facts, including the requirement that the investment heavy lifting must be done by private industry, and that means raising lots of investment capital from private sources.

Those sources already have made clear their fears that too much tinkering with broadband regulations, especially regulating broadband access as a common carrier service, will choke off investment.

The single-biggest substantive proposal is the plan to make 500 megahertz of new spectrum available for wireless communications by reallocating spectrum presently used by TV broadcasters.

It might be close to heresy, but if you look out 10 years, the business case for investing lots of money in fiber to home facilities is starting to look worse, not better. Many policy advocates call for much-higher speeds and lower costs at the same time. That's not a convincing scenario for investors who would have to take a chance on loaning money in that sort of market.

Also, to the extent that entertainment video has been a big part of the business case, not many observers would believe the future is as bright as the past has been. With voice also under pressure, it may not make as much sense as it once did to invest too aggressively in fixed broadband. Broadband still is the foundation service for fixed networks in the future.

But that is a different issue from the separate issue of how much investment ought to be made, because it is unclear how much users are willing to pay for really-fast service, or how much incremental revenue might actually be created by new applications that require really-fast broadband.

$17.5 Mobile App Sales in 2012

Mobile App Stores: A Closer Look from Plugg Conference on Vimeo.

A study conducted by mobile analyst Chetan Sharma and sponsored by GetJar suggests the market for paid mobile apps should grow to $17.5 billion within the next three years, implying a value greater than CD-based apps in 2012, when apps sold on physical media are projected to be $13.8 billion.

App downloads will leap from slightly more than seven billion in 2009 to nearly 50 billion in 2012, representing an annual growth rate of 92 percent, the study also suggests.

According to the study, by 2012, off-deck paid-for apps will be the biggest revenue generator, accounting for almost 50 per cent of all apps revenue.

In 2009, on-deck apps available from mobile operators accounted for over 60 percent of all apps revenue, but this will fall significantly to just under 23 percent by 2012.

The average app selling price for apps in North America was $1.09, significantly higher compared to that in developing markets such as South America ($0.20) and Asia ($0.10).

According to the study, revenue opportunities in Europe are set to grow from $1.5 billion in 2009 to $8.5 billion in 2012, while in North America the figure will rise from around $2.1 billion to around $6.7 billion in 2012.

Currently, apps are most popular in Asia, with the region accounting for 37 percent of global downloads (free and paid) in 2009. North American downloaders spend the most money on apps, accounting for over 50 percent of global app revenue.

Advertising and transactions are a growing portion of the way applications are monetized, though purchase fees will represent most of the revenue for the near term.

Recession Not the Issue, Structural Is What Challenges Telcos

The global telecom industry performed pretty much as it always does during the recent recession. Basically, revenue growth continued at low single digits, overall. As always is the case, some industry segments fared better than others, but consumer demand for communications and entertainment video services was steady.

Some might wonder whether some clear signs of consumer frugality will affect growth rates for some time to come, but even that is not the big issue.

The big issue is that wired communications is an industry with a cost structure too high for expected revenues over time, so cost cutting must continue and network operations must become even more efficient than they have, up to this point.

Ovum researchers point out that "the economic downturn hasn’t resulted in the downward pressure on telco top lines that many expected."

But Ovum researchers also point out that "revenue growth is in decline for many mature market operators, and slowing for those in emerging markets."

“Market saturation, increased competition and regulatory intervention on roaming and termination rates won’t disappear just because the economy picks up”, says Ovum Principal Analyst Clare McCarthy.

Telcos are cutting operating expenses and capital investment. They are also accelerating employee early retirement programs and stockpiling cash. Many telcos in fact are emerging from the downturn with healthier balance sheets than when they entered, as well as significant cash balances, Ovum says.

Covad Launches Ethernet Access Services Nationwide

Covad Communications Company is launching nationwide Ethernet access services in mid-April.

Designed especially to support business-class, real-time applications like Voice over IP, video, gaming, virtual private networks and video conferencing, at speeds from 1.5 Mbps to 35 Mbps out of more than 4,000 central offices reaching approximately 10 million businesses nationwide, the company says.

Covad will offer quality of service and class of service features and are backed by service level agreements.

“What will differentiate this product in the market are the integrated QoS and CoS options that give our partners immense flexibility in optimizing network performance based on their application requirements,” says Patrick Bennett, president and chief executive officer at Covad.

Covad began testing Ethernet services on a technical level with a limited offering in selected markets last year.

Buy Your Bandwidth When You Buy Your App

As the mobile industry starts selling more connections to support sensor networks and non-traditional mobile devices such as game players and media players, it is going to create new charging methods as well.

The Kindle, for example, hides the cost of connectivity in the sales price of content. That model likely will become more popular over time as more devices emerge that require occasional connectivity, but are unsuited to the traditional monthly or prepaid billing plans.

At the same time, assuming regulators do not outlaw the concept under the guise of "network neutrality," more operators may start experimenting with priority access and other quality of experience measure.

3UK, for example, gives users on  more-expensive plans access priority access when the network gets congested. Tiered service levels are one obvious way to allow users to match their preferences with their payment plans.

Application stores might offer another approach that is akin to the way Kindle now works. It might be the case in the future that some applications are sold in a way that incorporates the cost of bandwidth in the sales price of the software.

Some users will want to pay less, and take their chances with  YouTube viewing quality. Alternatively, a user might be able to buy a service that includes quality of service mechanisms for YouTube consumption.

In principle, that isn't much different from selling access plans offering varying bandwidth at varying prices, or different buckets of voice minutes of use or text messages or data consumption. The concept might be especially attractive for users at two ends of the usage spectrum.

Very-light users might prefer the lower overall cost of paying for just enough bandwidth to support their use of particular applications. "Power" or business users might be willing to pay much for the best possible quality for business conferencing or voice quality, especially when the network is congested.

Yes, that is a combination of network management and bit discrimination. But there is no good end-user focused reason to give consumers a choice of consumption options.

source

Augmented Reality Projects Web Data Onto the Real World

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Augmented reality overlays information from the Web on top of objects in the real world, typically when a user points a mobile phone camera at objects in the real world. In some sense, augmented realtiy takes Web accessible data and projects it in real time onto physical objects viewed by the camera. 

There are all sorts of prosaic applications one can imagine. Helping people buy shoes and clothing is an obvious commercial example. 

No Way to Predict Hot Apps, Gadgets of 2020, Experts Say

Technology experts surveyed by the Pew Internet & American Life Project overwhelmingly agree that the killer applications and gadgets of 2020 can not be foreseen right now. About 80 percent of respondents said the killer apps of 2020 will "come out of the blue" and will not have been anticipated.

For all the scenaio planning, brainstorming and research firms conduct and pay for, that is a rather surprising opinion. Essentially, most technology observers and technologists say we have no way of predicting what will be hot in 2020. That will not stop firms from creating product roadmaps and investing where they think the opportunities are greatest.

Despite all that, we still are likely to be surprised in 2020. In 2000, nobody would have predicted the iPhone, or perhaps have bet that Apple would be a bigger company than Microsoft. The first is fact, the second "only" a directional trend. Microsoft today still is a bigger company than Apple, at least in terms of market value. But the charts suggest Apple will overtake Microsoft.

How many forecasters would have predicted that?

full report

Bing Maps Augmented Reality Demo

I admit I use Google Chrome and Firefox more than I use Explorer and Bing. I use Google Maps; I don't use Bing Maps. But that doesn't mean Microsoft engineers are not working on new tweaks to provide more value for Bing and its related apps.

RIM, Apple, Google Grow in Smartphones, Microsoft and Palm Drop

Over the last three months, Research in Motion, Apple and Google have gained smartphone market share, while Microsoft and Palm have lost share, comScore says.

42.7 million people in the U.S. owned smartphones in an average month during the November 2009 to January 2010 period, up 18 percent from the August through October period.

RIM was the leading mobile smartphone platform in the U.S. with 43percent share of U.S. smartphone subscribers, rising 1.7 percentage points versus three months earlier. Apple ranked second with 25.1 percent share (up 0.3 percentage points), followed by Microsoft at 15.7 percent, Google at 7.1 percent (up 4.3 percentage points), and Palm at 5.7 percent.

Google’s Android platform continues to see rapid gains in market share.

In an average month during the November through January 2010 time period, 63.5 percent of U.S. mobile subscribers used text messaging on their mobile device, up 1.5 percentage points versus three months prior.
Browsers were used by 28.6 percent of U.S. mobile subscribers (up 1.8 percentage points), while subscribers who played games made up 21.7 percent (up 0.4 percentage points). Access of social networking sites or blogs experienced strong gains in the past three months, growing 3.3 percentage points to 17.1 percent of mobile subscribers.

Social networking now is more popular than listening ot music, at least where it comes to mobile device activities.

Apple is Going to be Bigger than Microsoft

Based largely on the strength of its position in the mobility space, Apple seems close to closing what once was an impossibly-large gap in equity value, compared to Microsoft. In 2000, Microsoft was about 600-percent larger than Apple, in terms of market capitalization.

One can argue it is the strength of the iPhone product line, or Apple's better positioning in the mobile business overall, that accounts for the change in market value. Long gone is the time when Apple was a PC supplier and Microsoft dominated the PC operating system market.

The difference between 2000 and 2010 was that where the 1990s might still have been an era of PC-based computing, the 2000 period saw the emergence of the Internet as the key factor in the computer-mediated experience business. Between 2010 and 2020 we are likely to witness yet another evolution based on mobility.

Unless Apple stumbles, or Microsoft somehow can discover a new and heightend role n mobile experience computing, Apple is going to be a bigger company than Microsoft. Market capitalization is not the only important measure of a company's stature, of course.

But Apple quitely has amassed a patent portfolio larger than Google's. Based largely on the strength of its position in the mobility space, Apple seems close to closing what once was an impossibly-large gap in equity value, compared to Microsoft. In 2000, Microsoft was about 600-percent larger than Apple, in terms of market capitalization.

One can argue it is the strength of the iPhone product line, or Apple's better positioning in the mobile business overall, that accounts for the change in market value. Long gone is the time when Apple was a PC supplier and Microsoft dominated the PC operating system market.

The difference between 2000 and 2010 was that where the 1990s might still have been an era of PC-based computing, the 2000 period saw the emergence of the Internet as the key factor in the computer-mediated experience business. Between 2010 and 2020 we are likely to witness yet another evolution based on mobility.

Unless Apple stumbles, or Microsoft somehow can discover a new and heightend role n mobile experience computing, Apple is going to be a bigger company than Microsoft.

Of course, market capitalization is not the only measure of a company's stature and influence. In that regard, Apple has been especially active in the patent filing arena. Between 2004 and 2007, when Apple was preparing the iPhone, it filed 507 patents, while Google filed just 67, for example.

Very few--in fact virtually none--of the leader's in one era of computing also were leaders in the next era of computing. Apple might be the first firm in computing technology ever to manage leadership in more than one era. Or, one can argue that Apple did not lead in the PC era, and is emerging now as a leader in the coming mobile Internet era because it has become a mobility company.

Right now, I can only think of three possible contenders for such history-making: Apple, Google and Cisco.

Google to Leave China?

Google has drawn up detailed plans for the closure of its Chinese search engine and is now “99.9 per cent” certain to go ahead as talks over censorship with the Chinese authorities have reached an apparent impasse, according to the Financial Times.

Google's search results are censored in China, as are results provided by all other search engines as well.

Google is also seeking ways to keep its other operations in China going, although some executives fear that a backlash from the Chinese authorities could make it almost impossible to keep a presence in the country, the Financial Times says.

But Google’s executives have made it clear that they still hope to stay in the country, whatever the fate of Google.cn. “It’s very important to know we are not pulling out of China,” Eric Schmidt, Google’s chief executive, told the Financial Times at the time. “We have a good business in China. This is about the censorship rules, not anything else.”

The company’s other operations, which pre-date the launch of Google.cn four years ago, include its research centre in Beijing and a sales force that sells advertising on the Chinese-language Google.com search service, based outside China, to advertisers inside the country.

This sort of issue has been tough for any companies doing business in China, in the past. Software and hardware sold by companies into China can, and are, used in ways that violate sensibilities in the West. Suppression of dissent, spying on citizens and so forth do happen in China, and technology supplied by Western firms is used to do so.

Google might have to take steps that many would agree are principled and just, but will harm its business interests. Similar thorny decisions have been made by other software and hardware suppliers to the Chinese market, with different outcomes. It's an area of moral tension executives cannot escape, though most seem to prefer not to talk about it.

Beyond all that, the dilemma shows that the old Internet, where any user could communicate freely with any other user, is gone. When the any government shuts down applications people use to communicate with each other, the old Internet is gone.

Financial Times article

The Creative Age is Different, Way Different

General Motors isn't Facebook. Heck, it isn't even Cisco or Microsoft. But neither are any of those companies like Facebook. I don't mean "like Facebook" in financial, social or cultural terms. Facebook is unlike other companies in the way that it creates a product. Most companies create products using some combination of internal resources ("employees") and business partners ("suppliers").

Most companies can tell you who "works for the company" and who does not. What is different about Facebook, and Wikipedia, Google and YouTube is that the "product" is produced by all sorts of people, both inside a "company," inside its "partner suppliers," and from "outside the company." What makes Facebook's product different is that "users" must participate to create a better and more useful product.

That might be true for any sizable organization, to some extent. Consumers help shape products when they decide to buy some more than others, and some not at all. Consumers help products evolve when they start to use products in new and unexpected ways.

But Facebook and others with a "social" product cannot develop with passive or secondary input. They require active creation of content, links and networks by participants. Not every product can be produced in this way. But it is a so-far distinctive attribute of products produced in a "post-information age" era.

Some might call the upcoming era the "creative" era, to differentiate it from the information age. Collaboration is a key cultural attribute of firms that create social products. Facebook depends on users, developers to create its product, which is an experience.

fuller discussion

More Evidence of How Hard it Is to Replicate Google's Success

It's an impressionistic, but useful take on Google's uniqueness among companies, that so few ex-Googlers have been able to replicate Google's success. Googlers are smart, there is no question about that. But Microsoft and many other firms go out of their way to hire "smart people." That fact alone does not seem to automatically produce out-sized results.

Think you can be the next Google?

Google's Culture Flat Out Rocks

Nilofer Merchant, Rubicon CEO and founder, has penned a fabulous post about Google's corporate culture, that is worth reading, especially because you and I will rarely, if ever, encounter a company with a culture this unusually oriented towards innovation; so fearless its atmosphere towards new ideas; so intellectually egalitarian.

Few companies you encounter will ever approach this level of cultural openness. You will run into lots of companies that claim they are this way. They are not. If you speak with enough people, at enough companies, you will discover that most of them think they are "above average," "very good" or even "excellent" at  customer service, or quality, for example.

By definition, this is incorrect. No normal distribution can have a majority, or the vast majority of the population ranked in the top five percent, 10 percent or 20 percent of anything. And yet that is what you'd tend to find, if you asked.

Google, whatever else one thinks about the company, should be applauded, studied and emulated, as should Apple, in some key ways, when it is possible. Most companies cannot meaningfully emulate the core cultural traits of either company, of course. But that's why Apple and Google will remain such important companies.

Most will not try to emulate them, and most cannot, even if they want to. Sometimes the problem is simply that the culture of an organization matches the core tasks it must tackle to be successful. You wouldn't expect a "Google" style culture at a nuclear power plant, a telco or larger military organizations.

You would hope and expect to find it on any small software team, smaller consulting organizations and think tanks, smaller research or policy institutes, smaller marketing firms or architectural firms. Note the emphasis on small; that normally has something to do with it. Still, smallness is a necessary but insufficient prerequisite.

Lots of small organizations are not "collaborative" in the robust sense. People matter.

Merchant's full post

Motorola Backflip Offers New Navigation Interface

Motorola's New "Backflip" offers a new way of navigating Web pages. The Backflip allows you to navigate its screen by touching a panel behind it, thus keeping fingers off of the screen. The Backflip, which runs on AT&T's 3G network, costs $100 after a $100 mail-in rebate and a two-year agreement.

Its name comes from its design: The Backflip's screen seems to flip backward when the QWERTY keyboard flips down for use. In the device's "closed" position, the keyboard flips back up and is automatically turned off.