iPod Touch: Optimized for Video and Web

The newly released iPod touch is for all intents and purposes an iPhone with reduced functionality. The iPod Touch skips Bluetooth, phone capabilities, a camera and has a lower quoted battery life.

It has more storage than the iPhone though, which tops out at 8 Gbytes. The Touch is available in 8 Gbyte and 16 GByte versions, whereas the iPhone is only available in 8GB capacities. Other than that, the iPhone and Touch are identical. 802.11b/g Wi-Fi is available on both devices.

The Touch uses the same interface as the iPhone as well, but the Touch is shorter and thinner. Brilliant people, those marketers at Apple. They are creating a family of products each optimized for a different use case. The iPhone is the most capable phone. The Nano is a cheaper video player. The iPod has the most memory if you a music player.
The iPod also has dedicated volume control buttons; Touch doesn't.

The Web browser on the Touch probably is a major positioning feature. Lots of users will focus on using Wi-Fi to download music. Personally, I see it more as a Web browsing platform. Email access is not something you'd really want to do on a Touch. That's a better experience on an iPhone but arguably not as good as an iPhone as on a BlackBerry.

To prevent people from confusing a Touch with an iPhone, Touch has no audio input jacks or Bluetooth, so you really can't use a microphone. It definitely is not a phone.

So the issue is what people will make of it. It's a better Web browser and video player than a music player. The iPod is a better music player. The video-capable Nano is a cheaper music and video player. The iPhone is the only phone. The Shuffle is a better device for running and exercising because of its non-existent footprint. Unless you need to keep stats on your training progress, in which case the Nano works with some Nike shoes to collect data for you.

The net result is that lots of users will wind up owning multiple Apple products, while Apple covers the whole range of price points for devices that all are mobile music players. Clever, those marketers at Apple.

All of this is interesting for other reasons as well. One wonders how long it will be until data-optimized, communicating mobile devices might develop as a distinct niche: optimized for Web applications primarily, though capable of handling email and voice. Would such a niche necessarily require full-time mobile access? Or is there room for use cases based on Wi-Fi connection as a primary access method? Perhaps dual mode capable, but without the recurring monthly post-paid fees? Perhaps prepaid mobile access as a supplement to Wi-Fi as the primary access? Using WiMAX perhaps?

The new use case would be based partly on the characteristics of the device, partly on the nature of the access, partly on the user payment model and partly on the provider business model.

BT Joins Fon

BT has decided that Fon, the global user-built Wi-Fi network, really is complementary to telco networks, and has joined the FON community, creating a new service known as BT Fon. U.S. cable operator Time Warner Cable also has done so. The value proposition might be pitched as "free Wi-Fi access when you roam if you buy our broadband."

The result is that now millions of BT broadband subscribers can automatically opt-in to the BT Fon community, potentially expanding the footprint where BT customers can get connected.

Fon users who are not BT broadband customers will not automatically get free access to the commercial BT Openzone hotspots and Wireless Cities hotzones and hotspot network serving 12 cities at the moment. They will get access at reduced fees, however. Access to BT Fon user Wi-Fi zones will be reciprocal.

And BT is putting its money where its mouth is, becoming a shareholder and partner in Fon. So Fon now is part of BT’s strategy to provide wireless broadband not just inside the home, but outside as well.

Neuf Cegetel in France also has joined the Fon community.

The deal also means that users of BT Fusion dual-mode handsets will be able to use those devices in far more locations around the world than had previously been possible. FON also has a software client that can be used on Nokia's Wi-Fi-enabled Nseries handsets.

BT Fon has the potential to dramatically increase the size of the global Fon network, as BT has more than three million consumer broadband customers who are free to opt in to the program. By way of contrast, Fon's global network now stands at 190,000 hotspots.

The Fon router sets up a secure channel of 512 kbps that is available to other Fon users.

"Google Me"; "Skype Me"

No matter what financial pundits say about EBay's purchase of Skype, Skype has had enormous impact. As "Google" now is a verb, as in "Google it," so is "Skype" as in "Skype me." Assets can trade one way or the other. But "assets" aren't the same thing as "significance" or "value" to people. Skype is hugely valuable to users. No matter how you want to quantify the matter--10 million concurrent peak users or 200 million downloads--that's a huge user base. More important, Skype is part of the fabric of daily life for millions of people, as is Google. We may agree that EBay overpaid for Skype. That has almost nothing to do with the social significance of Skype. That's huge.

HTC Touch: On the Cusp of Something Big

Something big is going on in the handset market, which appears to be developing clearer customer niches as device capabilities start to diverge. But the big thing isn't simply the handset proliferation. The proliferation of devices is creating lots of niches, and also showing why mobile is such a powerful way to do voice.

It isn't simply mobility. It is the ability to create human affinities for communications services never possible before. Marketers talk about "branding" their companies and services to create an image of quality, reliability, dependability, fun or some other attribute. But who really believes them?

Most consumers seem to regard every mobile provider as a functional substitute for some other provider. Ford or Chevy. There are brands. It simply isn't clear that the brands mean much.

But consider perfume. Perfume is so personal that the branding is everything, the actual fragrances like operating systems. Perfumes also are ultimately personal. A person doesn't buy a different perfume because it is on sale. And on what logical basis would any fragrance be "better" than another?

Of course, that's not the point. It isn't about "better." It is about "me." The whole point of perfume marketing is to create an indelible sense that a fragrance is the personification of "me." That's sticky. That's loyalty. That's the complete antithesis of a commodity.

Wireline service is nearly impossible to personalize. But wireless service is nearly infinitely capable of segmentation, personalization and creation of niches because the handsets personify the service. This is a very big deal.

But back to HTC. It isn't clear yet whether the touchscreen interface itself will become into an actual niche, but that feature certainly is associated at the moment with devices we might say are "fashion phones." And there are two devices clearly in that category using touchscreen technology: the iPhone and the HTC Touch.

As iPhone sets records for sales of the first million units of a new handset, Taiwanese phone maker HTC says it has sold approximately 800,000 units of its Touch smartphone as well, over just about the same timeframe. While not yet available in North America, the Touch features the same sort of touchscreen interface used by the iPhone.

Both the Apple and HTC Touches have touchscreens, Wi-Fi and media playback.

HTC has already announced a successor to the Touch, the Touch DUAL, a phone that adds 3G broadband and a slide-out keypad, borrowing concepts from Research in Motion's BlackBerry devices. It should launch in Europe later this month.

Originally an equipment maker for carriers and other handset vendors, HTC in the last two years has embarked on a major campaign to sell its own branded phones. The company specializes in innovatively designed handsets and mobile computers, many of them aimed at the enterprise market.

Like most HTC devices, the HTC Touch and the Touch Dual use the Microsoft Windows Mobile operating system.

The company also has launched three other devices: a 3G version of the ultramobile Shift computer that runs on Windows Vista; the P6500, designed for tough environments such as hospitals and police forces; and the S730, an update to its popular S710 phone that like its predecessor includes a slide-out qwerty keyboard in addition to a traditional mobile-phone keypad.

Even the "fashion" segment is going to evolve. Verizon is rolling out devices aimed at the more price conscious end of the fashion segment, especially where what is really needed is voice and text, without heavy Web, media player or email support.

As it seems to be turning out, though mobile phone "service" might be something of a commodity, the handset experience is anything but, and getting richer all the time. That essentially means mobile service is the closest communications equivalent to "perfume," clothing, music and other human products that have very high and very personal human meaning.

Verizon Shows its Hand: Four New Phones

We will start to see what Verizon ihas been thinking as it reportedly turned down the iPhone and the rumored GPhone as well. There are business model issues to consider, of course. But there also has been speculation that Verizon had something in mind to satisfy the iPhone segment of the market.

Perhaps we will start getting our answers soon, as Verizon has introduced four new phones with high visual appeal, built by Samsung, Research in Motion and Lucky Goldstar.

The new Samsung Juke, BlackBerry Pearl, LG Venus and LG Voyager are being launched simultaneously. That's sort of like responding to a cannon shot with a salvo.

The "Juke," Verizon's name for the Samsung U470 and reportedly features 2 GBytes of storage, A2DP Bluetooth and a 1.3 megapixel camera. The Juke will be sold exclusively by Verizon Wireless and will be available in blue, red and teal at launch.

BlackBerry will contribute a new Pearl model with a 2 megapixel camera, A2DP and a 3.5mm audio jack. Tinted silver, a color exclusive to Verizon Wireless, the BlackBerry Pearl 8130 has built-in GPS.

The dual screen "Venus" slider by LG features a miniSD expansion card slot, A2DP, a 2 megapixel camera and touchscreen capabilities, including vibration feedback. Available in both black and pink, it features one screen with vibration feedback. It also offers a microSD memory port that accommodates up to 8 GB of expandable memory.

The LG Voyager features a large external touchscreen and a QWERTY keyboard, plus a second screen. Verizon says the phone will feature a full HTML browser, microSD expansion card, 2 megapixel camera, A2DP and built-in stereo speakers. The Voyager will be available exclusively from Verizon Wireless. There is a removable microSD memory slot that holds up to 8 GB of memory.

Juke, an ultra-narrow phone that comes in three colors and is shaped like a chocolate bar, is said to be aimed at fashion-conscious users who don't need heavy email or Web surfing. Voyager most nearly squares up with the iPhone, but also appears better suited for heavy email and text usage. The new Pearl appears aimed at work users who want to carry the same device with them in their roles as consumers.

Verizon Wireless has not given exact pricing beyond saying each phone would target a different segment and range from under $100 to about $400.

Carrier Fiber Plans Accelerating?

Ofcom, the U.K. communications regulator, hasn't come to terms with BT about ways to speed up fiber to customer investments in the U.K. market. Up to this point BT has objected to earlier proposals that would have applied relatively robust wholesale requirements to new optical access plant. Perhaps there is new hope for some compromise that reassures investors, speeds up fiber deployment and yet offers some hope of a return.

Around the world, fiber to customer deployments seem poised to accelerate, but both competitive providers such as Illiad in France and Verizon in the United States have been punished by the financial community for daring to proceed with such deployments, which are costly, no doubt. U.S. cable companies have the same problem. Every time there is a hint that capital spending plans might intensify, equity values get hit. Comcast appears to be under that cloud as well at the moment.

Irrespective of the competitive elements of such decisions--obviously the providers making the investments want to keep the rewards, if they can be had--these networks can only be built by private capital. And private capital keeps making clear concern about the payback, whether those investments are made by cable companies, incumbent telcos or competitive providers.

At this point it is a simple fact that the investment framework has to reassure the capital markets. Yes, competition is desirable. But that has to be balanced against capital markets that actually loathe competition. Let's hope Ofcom and BT can thread this needle.

at&t to Launch VoIP Bundled with fiber

By the end of the year, at&t U-verse customers will be able to buy voice services running over the fiber-to-neighborhood service, instead of running a separate circuit-switched voice network to customer locations. The move signals that at&t is completely comfortable with the ruggedness and dependability of its VoIP offering, and is moving towards IP-based voice that can be interwoven with other services at&t plans to offer.

The move also is an early harbinger of a time when VoIP widely will be used as a standard replacement for landline voice, much as cable companies now use VoIP to deliver "digital voice" services that are feature equivalent with plain old telephone service but use IP technology.

The new VoIP offerng also will not be based on the CallVantage platform, because CallVantage "doesn't scale," at&t executives say.

The new VoIP product will be available in markets where at&t delivers U-verse TV.
at&t says its upgraded network will reach about eight million homes by the end of this year. The company intends to pass 18 million homes by the end of 2008.

Apparently at&t plans to move slowly offering VoIP services that run over Digital Subscriber Line, though.

From at&t's standpoint, that makes sense. Having watched IP, flat rate plans, competition, mobility, family plans and other forces wipe out much of the profit in long distance, VoIP stands poised to attack voice-based local access revenues as well. at&t will move, when it has to. But it is hard to fault them for not wanting to hasten the revenue decline from that product line.