Nokia Unveils N96

As its name implies, the N96 is the successor to the N95, Nokia's former high-end device. The dual slider device comes with 16 gigabytes of internal storage, plus a microSD slot, something the N95 8GB lacks. Like the N95, the N96 retains the
5-megapixel autofocus camera with Carl Zeiss Tessar lens.

But "flash" support is improved by the use of two LEDs to provide lighting. There is an integrated DVB-H mobile TV tuner. As audio support on the N95 was robust, we would expect the same from the N96.

On such a device one would expect Wi-Fi support and global positioning satellite capabilities, and both are included. The N96 is supposed to launch in Europe in the third quarter this year.

Microsoft Buys Danger

Microsoft is acquiring Danger Inc., a provider of social-oriented messaging software and services. Danger provides real-time mobile messaging, social networking services and other applications that historically have proven popular with younger users.

The acquisition further reinforces the importance Microsoft attaches to the mobile computing space.

Nokia Launches Mobile Ad Network

Nokia today announced the launch of the Nokia Media Network, a premium advertising network including over 70 properties including AccuWeather, Discovery, Hearst, Reuters, and Sprint.

Nokia touts the venture as the first global mobile ad network of top tier publishers. There is no doubt a story here: First, that advertising is becoming part of the revenue model for the mobile business. Second, that handset providers are carving out new space for themselves in the value chain. Third, that mobile handset manufacturers and service providers now are in the media business.

Google isn't going to have this market to itself.

Starbucks Chooses at&t for Wi-Fi

If you are a T-Mobile Hotspot user, don't panic. Your service will still work at Starbucks. But if you are anybody else, Starbucks and at&t are serving up something even more tasty.

Namely, two free hours a day of Wi-Fi access at Starbucks. Additional hours will cost $3.99 for additional two-hour chunks of time.

Under the earlier plan with T-Mobile, Starbucks customers needed a paid subscription to access the in-store Wi-Fi service.

Users also will have a choice of monthly subscriptions costing $19.99 that will enable access to other AT&T hot-spot locations in addition to Starbucks.

At&t broadband customers will be able to surf at the more than 7,000 Starbucks locations in the U.S. for free, as well. The new Wi-Fi partnership is expected to be introduced gradually at Starbucks locations this spring.

So seating is going to be harder to get, and access more congested. It's still a great deal.

Sony Ericsson Embraces Windows Mobile

Sony Ericsson will drop its own Symbian-powered operating system in preference for Windows Mobile 6 for a new high-end Web-capable smart phone. The move does not mean Sony Ericsson is abandoning Symbian for other devices, but does suggest that as mobile Web devices become more prevalent and important, a "PC-like" experience might be growing in importance. The move also suggests growing acceptance of Windows Mobile as an mobile operating system.

The Xperia X1, which it says is the first new brand to come from within Sony Ericsson, is the first device to use Windows Mobile 6.

The X1 handset is designed around media player applications and Web browsing and features a full QWERTY keyboard.

How Much Bandwidth is Enough?

Nobody yet knows how much Internet access bandwidth a typical user will need in the future, at peak times (average usage doesn't much matter). It is easier in many ways to model bandwidth requirements for entertainment video services. 

If a provider uses a "broadband" approach(in the sense of all linear channels being delivered to the user, whether or not the user is watching), it is a simple matter of ascertaining how many discrete video feeds one wishes to deliver, how much bandwidth each feed requires, and then doing some simple multiplication. 

 If one then decides to deliver all on-demand programming, one needs a switching infrastructure, and then must make some assumptions about simultaneous peak viewing. Will a typical user, at the peak viewing hour, want to watch one feed, two feeds or three, keeping in mind that one of the feeds might be recorded for later viewing while a second is actively watched. 

The Internet access portion of the planning exercise is more murky, but still hinges on video behavior. If business logic allows it, users might be able to stream video, even HDTV video, over IP connections. Whether this bandwidth is of the "public Internet" type or the "walled garden" type is less important, in some sense. 

 Assuming there is a revenue model, how much bandwidth must a service provider be able to provide? Whatever end users may think, a service provider will deliver bandwidth in amounts that allow it to make money, and no more. 

 So asking how much bandwidth users may want is probably less important than how much they are willing to pay to get that level of bandwidth. 

And so far, few users seem to have shown a willingness to spend hundreds of dollars to get symmetrical bandwidth, whether that is a T1 connection or a 50 Mbps symmetrical service from SureWest Communications. To use the old but useful analogy, all of us might enjoy driving a Lexus. But not all of us do. We solve our transportation problems, but not always with a Lexus. In principle bandwidth ultimately will represent that sort of choice as well. 

Just about anybody can buy a T1 connection today. But not all businesses do so, and few consumers do so. Granted, the bulk of consumer bandwidth requirements still will remain of the asymmetrical sort (barring a massive switch to peer-to-peer), so symmetrical bandwidth might not be the best analogy. Still, the question remains: how much bandwidth will consumers pay for? "Need" is it that sense a subsidiary question. 

There's no question typical consumers are showing a clear preference for paying more for higher bandwidth. The issue is the elasticity of that demand as service providers start to move into the "scores of megabits" range, and then contemplate bandwidths an order of magnitude higher than that (100 Mbps or more). 

 If one looks simply at the price-per-megabit, users have shown a wide willingness to pay $50 to $100 a month for unrestricted use of 200 Mbps to 500 Mbps of linear video (with implicit quality of service assurances). 

 They likewise have shown high willingness to pay $50 a month for a few megabits to several megabits per second of interactive Internet access bandwidth in the downstream direction, with no quality of service assurances. 

 Assume that most also have been willing to pay $50 a month or so for a wireline voice connection and you are looking at $150 to $200 worth of monthly revenue for services offering several hundred megabits-per-second of downstream bandwidth, plus services on top, using a highly asymmetrical network. 

That does not leave lots of headroom for networks that deliver more symmetrical bandwidth (scores of megabits per second in the upstream and hundreds of megabits per second for linear and on-demand video plus 100 Mbps for interactive applications). 

 In the consumer markets, the rule of thumb has been that $10 a month of incremental spending is a big deal. Still, shown a value proposition high enough, even $50 a month in incremental spending now has become fairly commonplace. 

So the issue might be more "how much will consumers pay?" rather than "how much bandwidth will they need?", as important as that question remains. 

There always are trade-offs engineers can make: bandwidth versus processing, processing versus storage, non-real-time versus real time, bandwidth versus image quality and so forth. Ultimately, consumers are going to drive access bandwidth with their wallets.

Will Sprint Unleash Nukes?

At this point, it is fairly clear to just about anyone that Sprint Nextel has to do something dramatic to reverse its sliding fortunes in the mobile services market. Sprint no longer has the luxury of time for small incremental changes that might change its fortunes "some day."

So the issue is whether Sprint will "go nuclear," unleashing some sort of market-disrupting attack it expects its competitors will not want to match. Its a risky gambit, to be sure. AT&T completely changed the basic way mobile voice minutes of use are packaged when it launched "Digital One Rate."

But the tactic has not had long-term differentiating value because all the other major carriers simply shifted their packaging to match. So Sprint has to find a proposition that is startling and compelling to end users, but not appetizing for the more dominant providers to mimic quickly.

If the attempt is to "drive sales through the roof," nothing short of a disruptive move will work. Some suggest "unlimited calling" is one such tactic. Some smaller wireless providers such as Leap Wireless have prospered by offering unlimited local mobile calling. In so doing Leap and others have carved out a definable niche in the "wireline replacement," value calling and ethnic market segments.

There is some thinking that unlimited calling on at least a continental basis might be the same sort of market-shaking move, eliminating the "what is the right bucket size?" decision every consumer has to make, and transforming what is still a service sold on the basis of "scarcity" into a service whose premise is "abundance."

In some sense, Sprint CEO Dan Hesse actually has to hope that such an assault really would drive call volumes through the roof. Because if Sprint can do so, and its relatively generous spectrum will support the additional traffic, some other key competitors--especially Verizon and at&t--might not be able to quickly turn up additional bandwidth to match the offer.

And that's the other part of the equation. The offer must shake up user perceptions of value compared to price, as did Digital One Rate. But the offer must challenge Sprint's competitors enough that they will not immediately respond.

And at some level this is a nuclear strategy in an operational sense: if Sprint moves to provoke a non-linear increase in voice usage, can it handle the load? More important, can Sprint's competitors handle increases of the same magnitude if they decide to respond to the offer.

Likewise, there is the financial angle. If competitors match Sprint's offer, what is the level of damage they sustain in average revenue per minute of use, or average revenue per user? How does Sprint price and package so a direct competitive response is too painful to contemplate?

If Verizon and at&t can't match the offer without losing more than they gain, they won't match the offer. And if they won't, Sprint gains the distinctive positioning it seeks.

"Going nuclear" is going to be dangerous. But the only thing more dangerous at this point is thinking Sprint somehow can "creep" its way to success. The issue is where "unlimited calling" is, in itself, destabilizing enough to achieve what Sprint wants.

My sense is that it would not. Leap Wireless already offers a plan that is for most users a "national unlimited calling" plan, for about $50 a month. But there are other angles.

Unlimited texting or Web access might be more attractive. If Sprint really wants to disrupt the market, it can do something about texting plans.