Who Will Create the "Conference in a Pocket" Phone?

The rumored Google Phone will have to carve out a niche beyond "smart phone" or "feature phone" to get any serious traction. Perhaps it can create a new dual-mode position, since nobody really has that one nailed down yet. It might be a stretch to create a position based on "location based services," since it is doubtful most people will understand that.

But some new developments elsewhere suggest it might ultimately be possible for somebody to capture a new "conference in my pocket" position. Webex now has created an iPhone compatible PCNow capability, opening a bit of a wedge for conferencing. And iotum says it will develop a conference app running on BlackBerry and Facebook.

The point is not simply the size of the niche, but the ability to create a buyer reason to use one service or terminal instead of others. There are lots of devices that handle email. But BlackBerry created and "owns" the "email in your pocket" mental niche. That doesn't mean only the BlackBerry can do this, but that the mental position creates a compelling reason to buy and use a BlackBerry even though other smart phones can do so. The iPhone's position still is developing, though the initial positioning is as a fashionista device.

The point is that the creation of a compelling mental positioning allows a device or service to stand out in a crowd of alternatives that arguably can provide the same basic functionality. A "conference in your pocket" device can provide the same sorts of marketing value.

Voice From Inside Facebook

Pat Phelan points out that there are perhaps nine voice applications users can launch from inside Facebook, including GrandCentral, RebMe by Rebtel, Phonebook by Jangl, MyPhone by Jaxtr, SkypeMe, One Minute Friend, Yakpack, Sitofono and the new conferencing application for Facebook released by iotum.

Corning FTTH Advance

Corning is introducing a new line of extremely bendable optical fiber cable based on its nanoStructures technology platform. The change in physical media might not seem so significant, as the new design allows cabled fiber to be bent around very tight corners with virtually no signal loss. So think about the way signals now are zipped around offices and homes. Coaxial cable (augmented by category 5 wiring for some fiber to customer installs) for homes and category 5 for offices. Up to this point, one reason for those choices is that optical media wouldn't bend enough to be useful as a drop media.

That doesn't alleviate the need for optical-to-electrical conversion, but could allow the conversion right at the end user device instead of some other demarcation point. In most cases it still will make sense to convert optical to electrical at a side of home network interface, for cost reasons alone. But designers will have lots more latitude in high-rise living units, where O/E conversion can be done at some point much closer to a cluster of users.

The advantage there is the network operator's ability to retain the benefits of optical bandwidth far deeper into the customer network, as all copper media carry less bandwidth than optical media does. So driving fiber deeper into a building has the same salutory effect as driving fiber deeper into a neighborhood: there is less bandwidth sharing, and therefore more effective bandwidth available to users.

The net effect is the ability to drive more fiber into customer networks at less cost than before, and to terminate optical networks closer to end users than ever before, at least in high-density settings. That, in turn, provides a boost for fiber to customer deployments in markets with high density housing. Verizon should like that.

GooglePhone: Big Issues

Speculation about a new Google Phone continues to mount. Add the Boston Globe to the Wall Street Journal as entities that have "uncovered" the prototype. Google executive Rich Miner, a co-founder of mobile software company Android (which was bought by Google two years ago), has not confirmed that he is working on a phone, but he is reported to have shown the alleged prototype to "a handful of Boston entrepreneurs and venture capitalists."

Dan Roth, president of VoiceSignal, and Mike Phillips, founder of speech-recognition firm Vlingo Inc., both are suggested as also working with Google on the device. Google's phone supposedly allows horizontal scrolling and has three-dimensional, animated buttons on the screen as well as a small QWERTY keyboard.

This will be interesting. Most tier one service providers will say Google is the competitor they worry about most, and wireless is the service now keeping the global industry moving forward.

We can safely dismiss the notion that Google will build handsets. We cannot discount Google becoming a service provider, though, as it just might bid for 700 MHz spectrum. In the meantime, it continues to work to seed existing networks with its software, so one cannot discount an "iPhone" deal with at least one wireless carrier.

But that's where matters get sticky. T-Mobile has the most to gain, but the worst network for browsing. Verizon has the network, but probably not the willingness. at&t is busy with iPhone and might not want the distraction. Sprint has the network and a long history of working with partners. The network access platform (CDMA) probably isn't the most important issue, but is a potential negative.

Then there's the issue of how coherent the value proposition is. BlackBerry is mobile email. iPhone is a fashion statement right now. It isn't clear what it will become as adoption broadens, though if it winds up being mobile Internet then Google has to take it on. Mobile search doesn't quite have the ring of something lots of end users will understand. The "Internet in your pocket" probably does, but iPhone is already there.

More important initially is the choice of network partner. "The Internet in your pocket when near a Wi-Fi access point" doesn't cut it, at least for me. That would have as little appeal as a mobile phone that only worked within range of a Wi-Fi access point. A small number of people might put up with the convenience, but it is hard to see lots of people doing so.

T-Mobile has lots of reasons for considering such a partnership. But that's the worst possible network for mobile browsing. As much as people complain about the bandwidth used to support the iPhone, they should have to use the T-Mobile data network before complaining. Negative user experience is about the only way to describe it.

Of course, Google could be angling for applications requiring low bandwidth, such as location-based and contextual information, not mobile search, or transaction capabilities based on such location-based capabilities. That wouldn't take much bandwidth. But that also wouldn't be the "Internet in your pocket."

Assuming the bandwidth issue can be finessed, the task of creating a new category remains. People understand the "email in your pocket" and "music in your pocket" positions. Mobile browsing, mobile payments, mobile advertising and location-aware services do not provide similar positions in the end user mind.

I suppose Google could attack the iPhone segment (similar features, much less price) but even there the message does not immediately seem clear.

Apple also had an advantage: it is well known for user interface innovation industrial design and ease of use. Apple also has a fanatical user base and was able to build off the wild success of the iPod. Google will not have those advantages.

And this is said by someone whose day begins and ends with Google, and for whom search is something that happens throughout the day. But the way I use Google (research) would not translate to the mobile environment. Mobile search would be a different use case and some new behaviors Google would have to stimulate and help create. Of course, BlackBerry and iPhone had to do so as well. I just can't tell you off hand what a Google Phone does for me, the way I can describe the BlackBerry and iPhone.

Separately, Google has filed a patent application covering an electronic on-line payment system it refers to as GPay. Using GPay, a server receives a text message from a payer containing a payment request for a specific amount. The server parses the text message to find out what value the payer account should be debited for, and
credits the payee account.

Of course, one way or the other, Google is going to be a presence in wireless. If Google wants a share of the mobile advertising market, and it clearly does, it needs control over more elements of the value chain.

Also, with wireless increasingly ubiquitous, and fourth generation wireless coming, Google has to get into position to extend beyond the PC experience. So Google seems to be working on an operating system and at least one handset.

It had made wireless enabling technology acquisitions, including Reqwireless (mobile apps: browser, email), Skia (graphics software), Android (OS)and Dodgeball (mobile social networking).

Google is developing mobile versions of existing apps such as its Calendar and AdSense apps. it is developing text message services such as real-time flight information, local search and payments.

Google might bid in the upcoming 700 MHz auction. it also is sealing deals with hardware makers to pre-install Google services on Samsung, Apple iPhone and LG devices and working with China Mobile and at&t--through the iPhone--to optimize the services for handset use.

Google also is supporting the Windows Mobile operating system. Google also is talking about a mobile virtual network in the U.K. market. And of course it has been experimenting with Wi-Fi networks, and is working with Sprint on that firm's WiMAX handsets.

FCC Ends RBOC Long Distance Restriction

The Federal Communications Commission has eliminated the old requirement that dominant local exchange carriers conduct long distance operations separately from their local access operations. The old regulations obviously don't make much sense in an environment where long distance has ceased to be a separate business, for the most part, and where all access providers routinely bundle access and long distance calling.

As a phase-in mesure, a&t, Verizon and Qwest agree to offer special rate plans tailored to consumers who use little long distance, for a period of three years. As most post-paid mobile calling plans all include bundles of calling including "local" and "long distance," the move allows the former regional Bell operating companies to reduce their overhead.

The change does not materially affect the way wireless and wireline calling is offered to the retail market. The issue isn't really long distance at all. Instead, the bigger issue is which servics, and how many servics, to buy as part of a single bundle, in the consumer market.

To encourage such behavior, Verizon recently increased the price of stand-alone FiOS broadband in some markets if isn't part of a voice or television bundle.

What does WiMAX Displace?

To the extent that mobile phone penetration is nearing saturation, while broadband access to businesses and homes also is close to saturaturated, at least as a technology supporting personal computers, one has to ask what customer demand WiMAX will cannibalize. Well, I suppose some people might argue WiMAX creates a new market, but the issue still is to envision what that new market is.

So far, it appears most observers other than Intel Corp. think WiMAX will supplant some other form of access.

Intel clearly sees WiMAX as a technology that changes demand for lap-top PCs. As Internet access has changed requirements for desktop machines, so Intel believes WiMAX will create new demand for mobile machines that are always connected.

But most service providers seem to view WiMAX as a technology that extends or replaces some other existing end user value or network. Sprint sees WiMAX as a technology that changes the mobile phone market by extending beyond third generation platforms, first augmenting and then replacing earlier generations of technology.

T-Mobile might view WiMAX as a technology that potentially displaces Wi-Fi hotspots. Cable and telephone companies see it as a threat to cable modem, fiber-to-home and Digital Subscriber Line services.

I wouldn't be so sure WiMAX ultimately will have most impact as a PC-affecting technology.

It seems to me more likely it will have much more significance as a mobile phone and mobile handheld device platform. There are all sorts of reasons why users aren't going to take advantage of mobile WiMAX from their PCs, including ambient light and furniture. Everybody can reach for and use a mobile in a pocket or purse.

Defanged Skype

For all the fear Skype and other IM-based and peer to peer voice applications and services have created in the broader service provider industry, Skype seems to have crested. Skype still has lots of registered users, but they don't seem to be calling and using Skype chat as much as they used to.

Remember the concern municipal Wi-Fi networks raised just two years ago? Telcos and cable companies were worried muni Wi-Fi would cannibalize cable modem and Digital Subscriber Line services. And dare we even mention Vonage and other independent VoIP providers.

In fact, the only threat that really has materialized is cable companies. At least in North America, cable companies have emerged as the most serious threat to wireline voice and broadband Internet access revenue streams. Everything else essentially has remained a flea bite.

On the video and audio content side, remember the hackles BitTorrent and Kazaa raised? Now we have iTunes, Joost and a legal BitTorrent working with content owners.

So what conclusions should one draw from all of this? Probably that "disrupting" powerful incumbents is going to be much harder than attackers once had believed. Bandwidth exchanges thought they'd reshape interconnection. Competitive local exchange carriers thought they'd capture a goodly portion of the wireline voice market. Independent DSL providers thought they'd catch the telcos sleeping. Internet Service Providers thought the same about dial-up.

Turns out incumbents have more resiliency than anybody might have thought.